Pressure cleaner washes away Nadel Ponzi chapter

John Cloud, who lost millions in scam, starts over by founding Gorilla Kleen.

By JOHN HIELSCHER

John Cloud, who was cleaned out by Arthur Nadel's $162 million Ponzi scheme five years ago, is cleaning up Southwest Florida these days.

Literally.

The longtime Sarasota resident rebounded from the crippling financial and business reversal by starting an exterior pressure cleaning company. It has spruced up everything from Ed Smith Stadium to the top of the Judge Lynn N. Silvertooth Judicial Center.

Still, despite the success, cleaning buildings with intense jets of water is not what the 60-year-old Cloud expected to be doing at his age.

Before the recession hit and Nadel's scam imploded, Cloud enjoyed the life of a successful business owner: He had millions of invested dollars earning tidy profits, a large vacation home in North Carolina and a 34-foot Sea Ray powerboat docked in Sarasota.

The Nadel Ponzi scheme wiped out what he thought was a $5 million investment, and the nation's real estate decline ended plans for a tony residential development in Lake Lure, N.C.

Now, he works long hours, six or seven days a week building Gorilla Kleen, his commercial pressure cleaning business, which has 13 employees and posted $550,000 in sales last year.

“Starting over was not a 'to do' goal of mine, not on the check list,” Cloud says. “This has made me appreciate how comfortable my life had been.”

Rise and fall

Cloud moved to Sarasota in 1966 with his family. Four years later, he was elected student body president at Sarasota High School.

He and Scott Wagman, the then-student body president at Riverview High School, are remembered for coming up with what was once called the world's longest basketball game — a 177-hour marathon between students of the two schools that they believed to be a world record at the time.

The game was played beginning Christmas Day, 1970, until Jan. 2, 1971. Final score: Riverview 9,216, Sarasota 8,980. While the game received some national recognition, it did not make the Guinness Book of World Records.

After earning a business degree from Vanderbilt University, Cloud worked at Force Engineering, a local manufacturer of Stiletto Catamarans. In 1983, he took over his family's timber business in Arkansas, which made laminated oak floors used in semitrailers.

Under Cloud, the business's annual sales grew from $1.5 million to $55 million. In 1998, Wabash National Corp., the nation's largest maker of semitrailers, bought it.

Referred by a friend, Cloud began investing with money manager Nadel in 2002. In all, he would invest more than $6 million with Nadel's Scoop Management, according to court records.

At the same time, he was withdrawing $1 million a year in what he — like hundreds of other Scoop clients — believed were profits from Nadel's hedge fund trading.

But Nadel's wildly successful investment strategy — he claimed annual profits of 30 to 40 percent — turned out to be a Ponzi scheme that collapsed in January 2009. Nadel pleaded guilty to fraud and died in a North Carolina prison in 2012.

“I take 100 percent responsibility for that matter,” Cloud says, meaning his trust in Nadel. “I have no one to blame but myself.

“If I just blame him, then I'm helpless. This way, I'm still in control of my life,” he said.

Nadel cost Cloud more than his nest egg: Cloud wound up in a lengthy legal tussle with attorney Burt Wiand, the court-appointed receiver in the Nadel case.

Wiand claimed Cloud took out more money from Nadel's funds than he put in, and the receiver sued to recover about $2 million in so-called “false profits.”

The receiver also sued to recover money from a Cloud family trust, as well as funds from Cloud's ex-wife, Diana. Wiand dropped that suit after learning that Diana Cloud had pulled her money out of Nadel's funds and placed it with Beau Diamond — another convicted Ponzi schemer from Sarasota — who lost it all.

Meanwhile, Cloud faced another setback when the nation's residential real estate decline stalled the Lake Lure development. Lots that had been sold for $1.2 million suddenly fetched $250,000 — for the few buyers looking to purchase vacation home property at the time.

To stave off Wiand and other creditors, Cloud filed for Chapter 7 bankruptcy in 2012, listing $4,300 in assets and $14.3 million in liabilities — including $10 million to North Carolina banks.

To settle his debts, somewhat, Cloud lost the Sea Ray to a bank, and sold homes in Sarasota and Lake Lure for a big loss.

“I had to go back to work after Nadel,” he said. “I had to come up with something to do.”

He looked into an offer for a franchised pressure washing operation, but decided to start his own.

To give the company an edge, he uses 8-gallon-per-minute pressure washers. Cloud says they deliver twice the power of the typical washers used by many cleaners.

“Good cleaning is more technique and the right cleaning solutions than simply blasting away with a pressure washer,” he said.

In addition to the washers, Cloud employs a variety of bleaches, chemicals, sealers and biocides to scrub roofs, walls, driveways and sidewalks.

By Cloud's client list, which includes a Sarasota Memorial Hospital parking garage, portions of Ed Smith Stadium, the Kane Plaza office building's roof and several parts of the Hyatt Regency Sarasota — business appears to be pretty good.

Dave Rovine, vice president of Orioles-Sarasota, said Gorilla Kleen was hired for the first time last year to pressure clean awnings and the concrete floors where fans sit.

“We brought them back again,” Rovine said. “When we find somebody who does quality work, we like to stick with those people.”

At the Hyatt, Gorilla Kleen has handled a number of exterior issues in the last two years, including a rush cleaning of the driveway before the Sarasota Republican Party's Lincoln Day Dinner, said executive housekeeper Eleonora Walker.

“I can call him at 8 at night, he will be here at 9 to look and be on time for a 7 a.m. job,” she said, adding the lodging job is especially sensitive because cleaning has to be done without disturbing guests.

The 294-room hotel's pool deck has become a frequent project. “That's his baby,” Walker said.

For three years Gorilla Kleen has removed artwork from the Sarasota Chalk Festival, although this year sealants used to protect the chalk from rain made clean-up more difficult.

The company has also removed unwanted graffiti from bridge abutments at Nathan Benderson Park for Sarasota County.

Outside of Southwest Florida, FedEx Freight hired Gorilla Kleen to dry clean yellow directional strips on the floors of its warehouses in Ocala, Orlando and West Palm Beach.

Things do not always go smoothly, though. In one case, cleaning solvents interacted with a flaw in some house paint and altered the hue of a client's home.

“We turned a gray house green,” Cloud said, adding that he paid to have the house repainted.

Then there is the frustration surrounding government bidding, stemming from requirements that governments accept the lowest bids on jobs.

In one case, Cloud bid $83,000 to clean some city sidewalks. A competitor came in at $11,000 and won the contact — until the city realized the work was not getting done.

“The lowest price is not always the best price,” Cloud said.

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